Release Date: January 30, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- SRF Ltd (BOM:503806, Financial) reported a 14% year-on-year growth in gross operating revenue for Q3 FY25, reaching INR3,491 crore.
- The Chemicals business showed strong performance with a 7% year-on-year revenue growth and a 10% increase over Q2 FY25.
- The Packaging Films business achieved a 27% year-on-year revenue growth, supported by strong sales of value-added products.
- The company has received registrations for future active ingredients, indicating potential for increased sales in FY26.
- SRF Ltd (BOM:503806) declared a second interim dividend of 36%, reflecting its commitment to shareholder returns.
Negative Points
- The geopolitical environment remains uncertain, potentially impacting future business operations.
- Export realizations for some refrigerant gases were soft, affecting overall performance.
- The domestic market for aluminum foil faced margin pressure due to lower-cost imports from China.
- The Coated Fabrics business experienced lower demand in the domestic market.
- The strengthening of the US dollar negatively impacted results by approximately INR34 crore.
Q & A Highlights
Q: Can you discuss the R32 capacity expansion under the quota system?
A: Rahul Jain, President and CFO, stated that the current R32 capacity is around 25,000 to 28,000 tonnes, with no immediate plans for expansion. The quota system is based on production and consumption, and future expansions will depend on market conditions.
Q: Are we on track with the new AI milestones, and will Q4 be better than the previous year?
A: Rahul Jain confirmed that they are on track with AI milestones, with some registrations completed. He expects Q4 to be strong, potentially better than the previous year, driven by new product traction and customer demand.
Q: What is the outlook for PTFE pricing and utilization?
A: Rahul Jain noted that domestic PTFE pricing remains stable, with export traction expected to improve. Utilization is expected to increase in FY26 as international market approvals are obtained.
Q: Will SRF have a monopoly in the ref gas business in the coming years?
A: Rahul Jain clarified that a monopoly is unlikely due to ongoing imports and other players' expansion plans. However, the growing AC market in India should boost domestic demand for HFCs.
Q: How is the ref gas pricing trajectory looking domestically and in export markets?
A: Rahul Jain mentioned that there has been a price increase domestically and in some international markets. He expects pricing to remain strong, with historical low prices recovering.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
